Pritzkers could gain $900 million from Hyatt IPO

The feuding Pritzker family, which controls Hyatt Hotels Corp., could reap about $900 million from the company's initial public offering, while the company itself "could receive no proceeds," the Wall Street Journal reported.

The article cited an amended prospectus filed Oct. 19 with the Securities and Exchange Commission:

The latest filing set out for the first time an estimated offering price of $23 a share to $26 a share and said that the Pritzkers ... would be offering 38 million shares for sale. However, the company said it wouldn't be issuing stock in the offering unless there is enough public demand beyond the Pritzker shares. In that case, the prospectus said, Hyatt would allot the offering's underwriters, led by Goldman Sachs & Co., up to 5.7 million shares. The sale of that full allotment would net Hyatt an estimated $125 million, the prospectus said.



The report noted that the arrangement "is a departure from the plan laid out in the most recent prior prospectus, filed four days earlier on Oct. 15." In that version, the company said it planned to sell shares and additional stock would be offered by the Pritzkers, with a possible offering of further shares through the underwriters' allotment.

Even if the Pritzkers sell all 38 million shares offered, the family will retain control of Hyatt, the prospectus said. The Pritzkers will have about 60% of the outstanding shares and a higher percentage of voting power.



Many of the modifications to the IPO have been made "as a result of a simmering family feud," primarily "involving the control and parceling out of the family's vast holdings," the Journal reported. (Source: Wall Street Journal, Oct. 23, 2009.)